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The U.S. Supreme Court on Friday agreed to decide whether charities run by religious groups have to pay unemployment taxes that cover their employees.

Most, but not all, states generally exempt religious groups from having to pay into the state’s unemployment tax system. Federal law does exempt religious schools from having to participate in the federal-state program. But the court has never ruled on the question of participation by charitable organizations run by religious groups. Now the court has agreed to tackle the question in a case brought by Catholic Charities against the state of Wisconsin.

The Catholic Charities Bureau of the Diocese Superior, Wisconsin, a non-profit corporation, is the social ministry arm of the Catholic Church. Its mission is to “carry on the redeeming work of our Lord by reflecting gospel values and the moral teaching of the church,” and it carries out that mission by “providing services to the poor and disadvantaged” without making distinctions “by race, sex, or religion.” The organization hires staff without regard to religion, instructs that the charity should be exercised “in an impartial manner towards members of other religions,” and operates “dozens of programs in service to the elderly, the disabled, the poor, and those in need of disaster relief.” In addition, the charity avowedly does not proselytize.

In light of all that, Catholic Charities applied to the state for an exemption from paying unemployment taxes for its employees. But the state labor commission refused the application, on grounds that the charitable group was engaging in activities that “are not religious, per se,” and thus are not entitled to be exempt from paying unemployment taxes.

In March, a closely divided state Supreme Court agreed, citing what it called objective criteria. The state court said that the charity’s activities were mostly secular, noting that the organization does not “attempt to imbue program participants with the Catholic faith, nor supply any religious materials.” The state court also observed that the charity “did not proselytize, did not conduct worship services, religious outreach, or religious education.” Therefore, the state court concluded, the charity is not qualified to be exempt from state unemployment taxes as a religious institution.

Catholic Charities promptly appealed to the Supreme Court, asserting that the Wisconsin decision violates the First Amendment guarantee to the free exercise of religion, as well as the separation between church and state.

The court will hear arguments in the case after the first of the year, with a decision expected by late June.